<PAGE>
PRECISION CASTPARTS CORP.
4600 S.E. Harney Drive
Portland, Oregon 97206-0898
_____________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 3, 1994
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of Precision Castparts Corp. (Company) will be held in the
Intermediate Theater of the Portland Center for the Performing
Arts, 1111 SW Broadway, Portland, Oregon, on Wednesday, August 3,
1994, at 2:00 p.m., Pacific Time, for the following purposes:
(1) to elect three directors to serve terms of three years
and one director to serve a term of one year;
(2) to approve the Company's 1994 Stock Incentive Plan;
(3) to ratify the appointment of Price Waterhouse as
auditors of the Company for the fiscal year
ending April 2, 1995; and
(4) to transact any other business that properly comes
before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on June 3,
1994 are entitled to notice of and to vote at the meeting. The
meeting is subject to adjournment from time to time as the
shareholders present in person or by proxy may determine.
All shareholders are invited to attend the meeting in person.
Whether or not you plan to attend the meeting, please promptly
sign and return the accompanying form of proxy in the enclosed
return envelope.
By Order of the Board of
Directors
Roy M. Marvin
Secretary
Portland, Oregon
June 20, 1994
</Page>
</Page>
PRECISION CASTPARTS CORP.
4600 S.E. Harney Drive
Portland, Oregon 97206-0898
_______________________________________________
PROXY STATEMENT
_______________________________________________
A proxy in the accompanying form is solicited by the Board of
Directors of Precision Castparts Corp. (Company) for use at the
1994 Annual Meeting of Shareholders to be held in the
Intermediate Theater of the Portland Center for the Performing
Arts, 1111 SW Broadway, Portland, Oregon, on Wednesday, August 3,
1994, at 2:00 p.m., Pacific Time, or at any adjournment thereof.
The approximate date on which this proxy statement and the
accompanying proxy form are first being sent to shareholders is
June 20, 1994.
The power of the proxy holders will be suspended if the person
executing the proxy is present at the meeting and elects to vote
in person. Any proxy may be revoked prior to its exercise upon
written notice to the Secretary of the Company. The shares
represented by each valid, unrevoked proxy will be voted in
accordance with the instructions specified in the proxy, if
given. If a signed proxy is returned without instructions, it
will be voted for the nominees for director, for the approval of
the proposals presented and in accordance with the
recommendations of management on any other business that may
properly come before the meeting or matters incident to the
conduct of the meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The Company's outstanding voting securities at the close of
business on June 3, 1994 consisted of 13,165,580 shares of common
stock, without par value (Common Stock), each of which is
entitled to one vote on all matters to be presented at the
meeting. Only shareholders of record at the close of business on
June 3, 1994 are entitled to notice of and to vote at the meeting
or any adjournment thereof. The Common Stock does not have
cumulative voting rights.
The following table shows information about each person known
to the Company to be the beneficial owner of more than five
percent of the Company's outstanding Common Stock on May 2, 1994.
<TABLE>
<CAPTION>
Name and Address
of Number of Percent
Beneficial Owner Shares Owned of Class
_________________________________________________________________
<S> <C> <C>
State Farm Mutual Automobile 1,287,400(1) 9.8
Insurance Company
One State Farm Plaza
Bloomington, IL 61710
Edward H. Cooley 863,226(2) 6.6
4600 S.E. Harney Drive
Portland, OR 97206-0898
<F/n>
____________
(1) Based on information supplied by the shareholder.
(2) Includes 32,500 shares owned by Mrs. Cooley as of May 2,
1994, as to which Mr. Cooley disclaims beneficial ownership.
</TABLE>
</Page>
<PAGE>
The following table, which was prepared on the basis of
information furnished by the persons described, shows ownership
of the Company's Common Stock by each director and director
nominee, by the Chief Executive Officer and each of the other
four most highly compensated executive officers; and by all
directors and executive officers of the Company as a group, as of
May 2, 1994.
<TABLE>
<CAPTION>
Number of Percent of
Name Shares Class
_________________________________________________________________
<S> <C> <C> <C>
Edward H. Cooley 863,226(1) 6.6
Mark Donegan 11,262(2) *
Don C. Frisbee 6,650(3) *
Howard W. Hill 9,500(4) *
William D. Larsson 24,507(5) *
Carroll M. Martenson 10,500(6) *
Roy M. Marvin 55,218(7) *
William C. McCormick 120,007(8) *
Kenneth H. Pierce 26,449(9) *
Steven G. Rothmeier 1,000 *
Dwight A. Sangrey 1,600(10) *
Harry C. Stonecipher 3,250(11) *
Peter G. Waite 70,635(12) *
All directors and executive
officers as a group 1,203,808(13) 9.1
<FN>
__________
* Less than 1 percent
(1) Includes 32,500 shares owned by Mrs. Cooley as of May 2,
1994, as to which Mr. Cooley disclaims beneficial ownership.
(2) Includes 11,266 shares subject to options that are
exercisable or become exercisable by Mr. Donegan within 60
days after May 2, 1994.
(3) Shares held jointly with Mrs. Frisbee; includes 4,500 shares
subject to options that are exercisable or become
exercisable by Mr. Frisbee within 60 days after May 2, 1994.
(4) Includes 5,000 shares held in the Hill Family Trust and
4,500 shares subject to options that are exercisable or
become exercisable by Mr. Hill within 60 days after May 2,
1994.
(5) Includes 23,339 shares subject to options that are
exercisable or become exercisable by Mr. Larsson within 60
days after May 2, 1994.
(6) Includes 6,000 shares held jointly with Mrs. Martenson;
includes 4,500 shares subject to options that are
exercisable or become exercisable by Mr. Martenson within 60
days after May 2, 1994.
(7) Includes 27,548 shares held jointly with Mrs. Marvin;
includes 27,670 shares subject to options that are
exercisable or become exercisable by Mr. Marvin within 60
days after May 2, 1994.
(8) Includes 84,762 shares subject to options that are
exercisable or become exercisable by Mr. McCormick within 60
days after May 2, 1994.
(9) Includes 4,500 shares subject to options that are
exercisable or become exercisable by Mr. Pierce within 60
days after May 2, 1994.
(10) Includes 1,500 shares subject to options that are
exercisable or become exercisable by Mr. Sangrey within 60
days after May 2, 1994.
(11) Includes 250 shares subject to options that are exercisable
or become exercisable by Mr. Stonecipher within 60 days
after May 2, 1994.
(12) Includes 10,000 shares owned by Mrs. Waite and 5,000 shares
owned by children of Mr. Waite. Includes 54,244 shares
subject to options that are exercisable or become
exercisable by Mr. Waite within 60 days after May 2, 1994.
(13) Includes 221,031 shares subject to options that are
exercisable within 60 days after May 2, 1994.
</TABLE>
Page 2
</Page>
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
Pursuant to the Company's Bylaws, the Board of Directors is
divided into three classes, and the term of office of one class
expires each year. The terms of three directors, Edward H.
Cooley, William C. McCormick and Dwight A. Sangrey, expire in
1994. These three positions on the Board of Directors will be
filled at the annual meeting. In addition, in February 1994, the
Board of Directors appointed Steven G. Rothmeier to fill a newly
created director position in the class with a term of office
expiring at the 1995 Annual Meeting. Mr. Rothmeier is nominated
for election at the 1994 Annual Meeting for the remaining one-
year term of such class. If any of the nominees for director
becomes unavailable for election for any reason (none being
currently known), the proxy holders will have discretionary
authority to vote pursuant to the proxy for a suitable substitute
or substitutes.
The following table briefly describes the Company's nominees
for director and the directors whose terms will continue. Except
as otherwise noted, each has held his principal occupation for at
least five years.
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Term
and Other Directorships Since Expires
_________________________________________________________________
Nominees
<S> <C> <C>
Edward H. Cooley -71 1956 1994
Until October 1993, Chairman of the Board and until
August 1991, Chief Executive Officer of the Company;
President of Hillsboro Helicopters, Inc., a flight
training and service company
William C. McCormick -60 1986 1994
President and Chief Executive Officer of the
Company since August 1991; from 1985-91,
President and Chief Operating Officer of the
Company
Steven G. Rothmeier -47 1994 1994
Chairman and Chief Executive officer of Great
Northern Capital, a private investment and
merchant banking firm; Chairman of the Board of
Alliant Techsystems, Inc.; Director of
Honeywell, Inc., Metropolitan Financial Corp-
oration, E.W. Blanch Holdings, Inc., and Depart-
ment 56, Inc.
Dwight A. Sangrey -54 1990 1994
President and Chief Executive Officer of
Oregon Graduate Institute of Science &
Technology; Director of Northwest Natural Gas Company
Directors Whose Terms Continue
Don C. Frisbee -70 1983 1995
Retired Chairman of the Board and, until
January 1989, Chief Executive Officer
of PacifiCorp, diversified utility; Director
of Weyerhaeuser Company, First Interstate
Bank of Oregon, N.A. and First Interstate
Bancorp
Carroll M. Martenson -72 1983 1995
Retired Chairman of the Board and, until
March 1989, Chief Executive Officer of Esterline
Technologies Corporation, manufacturer of
factory automation equipment and aerospace
components
Harry C. Stonecipher -58 1992 1995
Chairman of the Board of the Company since
October 1993; President and Chief Executive Officer
and, since August 1991, Chairman of the Board
of Sundstrand Corporation, a manufacturer of
systems and components for aerospace and industrial
applications; formerly Executive Vice President, and
then President and Chief Operating officer, of
Sundstrand Corporation; Director of Cincinnati
Milacron, Inc. and Lukens, Inc.
Page 3
</TABLE>
</Page>
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Term
and Other Directorships Since Expires
_________________________________________________________________
Directors Whose Terms Continue
<S> <C> <C>
Howard W. Hill -67 1983 1996
Chairman of the Board of Directors of Zero
Corporation, manufacturer of enclosures for
the electronics and computer industries
Roy M. Marvin -63 1967 1996
Vice President Administration and Secretary
of the Company
Kenneth H. Pierce -70 1956 1996
Retired Chairman of the Board of Instromedix,
Inc., manufacturer of medical electronic
equipment; President and Director of Instromedix,
Inc. from 1980 to 1991
</TABLE>
In fiscal 1994, the Company's Board of Directors met seven
times. The Company's directors, other than full-time employees,
were paid $15,000 per year plus $1,500 for each Board meeting
attended in person and $750 for each committee meeting attended
in person. During the period Mr. Cooley served as Chairman of the
Board he was paid a $20,000 annual fee with respect to his
service as Chairman under the terms of an agreement with him.
This agreement terminated upon Mr. Cooley's retirement as
Chairman in October 1993. In consideration for his services as
Chairman, Mr. Stonecipher will receive a grant of 2,000 shares of
common stock at the date of the Company's Annual Meeting each
year. Each director attended at least 75 percent of the aggregate
number of meetings of the Board of Directors and the committees
of which he was a member, except Mr. Martenson, who attended 67
percent of such meetings.
Any director who is not an employee of the Company and has not,
within two years, been an employee of the Company (Nonemployee
Director) is eligible to receive options under the 1987
Nonemployee Directors' Option Plan (Directors' Plan). The option
price for all options granted under the Directors' Plan is the
fair market value of the Common Stock on the date the option is
granted. On the date of each annual meeting of shareholders, each
new Nonemployee Director is automatically granted an option to
purchase 1,000 shares of Common Stock at the time of his or her
initial election to the Board. Each Nonemployee Director who is
reelected at such meeting or who continues in office, serving a
term for which such director was previously elected, is also
automatically granted an option to purchase 1,000 shares of
Common Stock. Messrs. Frisbee, Hill, Martenson, Pierce, Sangrey
and Stonecipher each were automatically granted an option for
1,000 shares of Common Stock at an exercise price of $23.00 per
share on the date of the 1993 Annual Meeting of Shareholders. All
options have a 10-year term from the date of grant. Each option
becomes exercisable for 25 percent of the number of shares
covered by the option at the end of each of the first four years
of the option term. Options may be exercised only while the
optionee is a director of the Company, within one month after the
date the optionee terminates service as a director or within one
year after the optionee's death, disability or retirement under
the Company's policy requiring retirement of directors. Options
become fully exercisable upon normal retirement or in the event a
director resigns or is removed within 12 months of a change in
control of the Company.
The Board of Directors has five standing committees. The
Compensation Committee makes recommendations to the Board of
Directors concerning officers' compensation and the granting of
stock options. See "Report of the Compensation Committee on
Executive Compensation" below. Its members are Messrs. Frisbee,
Martenson, Rothmeier and Stonecipher. The Nominating Committee
makes recommendations to the Board of Directors concerning
nominees to the Board of Directors. Its members are Messrs.
Cooley, Pierce, Sangrey and Stonecipher. The Executive Committee
has authority to exercise the power of the Board of Directors,
with certain exceptions, between meetings of the Board of
Directors. Its members are Messrs. Cooley, Frisbee, Hill,
Martenson, McCormick and Stonecipher. The Audit Committee meets
with management, internal auditors and the Company's independent
public accountants, who have access to the Audit Committee with
Page 4
</Page>
<PAGE>
and without the presence of management representatives. The Audit
Committee is composed of Messrs. Hill, Pierce, Rothmeier and
Sangrey. The Environmental Committee meets quarterly with the
Company's Environmental Affairs Managers to monitor and advise on
environmental matters concerning the Company. The Environmental
Committee is composed of Messrs. Marvin and Sangrey. The
Compensation Committee met two times separate from Board
meetings, the Audit Committee met two times and the Environmental
Committee met four times in fiscal 1994. The Nominating Committee
and the Executive Committee did not hold meetings separate from
Board meetings in fiscal 1994. Shareholders who wish to submit
names to the Nominating Committee for consideration should do so
in writing between May 19, 1995 and June 13, 1995, addressed to
the Nominating Committee, c/o Corporate Secretary, Precision
Castparts Corp., 4600 S.E. Harney Drive, Portland, Oregon 97206-
0898, setting forth (a) as to each nominee whom the shareholder
proposes to nominate for election or reelection as a director,
(i) the name, age, business address and residence address of the
nominee, (ii) the principal occupation or employment of the
nominee, (iii) the class and number of shares of capital stock of
the Company beneficially owned by the nominee and (iv) any other
information concerning the nominee that would be required, under
the rules of the Securities and Exchange Commission, in a proxy
statement soliciting proxies for the election of such nominee;
and (b) as to the shareholder giving the notice, (i) the name and
record address of the shareholder and (ii) the class and number
of shares of capital stock of the Company beneficially owned by
the shareholder.
Directors are elected by a plurality of the votes cast by the
shares entitled to vote if a quorum is present at the meeting.
Abstentions and broker non-votes will be treated as shares
present and not voting.
Certain Transactions
Upon Mr. Cooley's retirement as Chief Executive Officer of the
Company in August 1991, the Company entered into a renewable
consulting arrangement with Mr. Cooley pursuant to which he
provided advice and counsel to the Company on matters including
operations and special projects. This agreement was renewed
through October 1993, when Mr. Cooley retired as Chairman of the
Board, at which time the arrangement was terminated. Mr. Cooley's
compensation under this arrangement was $8,333 per month, plus
automobile usage and membership dues valued at $2,215 per month.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors
(Committee) is composed of four non-employee directors. Pursuant
to authority delegated by the Board, the Committee initially
determines the compensation to be paid to the Chief Executive
Officer and to each of the other executive officers of the
Company. Following such determination by the Committee, issues
concerning officer compensation are submitted to the Board of
Directors for approval. Directors who are also officers of the
Company do not participate in this approval process. The
Committee also is responsible for developing and making
recommendations to the Board with respect to the Company's
executive compensation policies.
The Company's compensation policies for officers (including the
named executive officers) are designed to fairly compensate the
Company's executives and to provide incentive for the executives
to manage the Company's business effectively for the benefit of
its shareholders. To assist the Compensation Committee and the
Board of Directors in achieving those ends, the Company retains
the services of an independent consultant with special expertise
in compensation matters, to assist in the design and monitoring
of compensation arrangements that are fair and competitive for
the executives and consistent with the objectives of the
shareholders.
The key objectives of the Company's executive compensation
policies are to attract and retain key executives who are
Page 5
</Page>
<PAGE>
important to the long-term success of the Company, and to provide
incentive for these executives to achieve high levels of job
performance and enhancement of shareholder value. The Company
seeks to achieve these objectives by paying its executives a
competitive level of base compensation for companies of similar
size and industry and by providing its executives an opportunity
for further reward for outstanding performance in both the short
and the long term. It is the current policy of the Committee to
set base salaries conservatively and to emphasize opportunities
for performance-based rewards through annual cash bonuses and
stock options.
Section 162(m) of the Internal Revenue Code of 1986, as adopted
in 1993, limits to $1,000,000 per person the amount that the
Company may deduct for compensation paid to any of its most
highly compensated officers in any year after 1993. The levels of
salary and bonus paid by the Company do not exceed this limit.
Under proposed regulations, the $1,000,000 cap on deductibility
will not apply to compensation received through the exercise of a
nonqualified stock option that meets certain requirements. Option
exercise compensation is equal to the excess of the market price
at the time of exercise over the option price and, unless limited
by Section 162(m), is generally deductible by the Company. It is
the Company's current policy generally to grant options that meet
the requirements of the proposed regulations.
Executive Officer Compensation Program
The Company's executive officer compensation program is
comprised of three elements: base salary, annual cash bonus and
long-term incentive compensation in the form of stock options.
Salary. Base salary ranges for each of the Company's executive
officers are established relative to companies of comparable size
and to a comparator group which in 1994 consisted of fifteen
companies (of which five were major business units of large,
diversified companies) in the aerospace/defense and
machinery/machine tool industries in which the Company competes
for employees, as determined by surveys reported by the Company's
compensation consultant. All of the companies included in the
comparator group are part of the Dow Jones Aerospace and S&P
Aerospace and Defense indices included in the Comparison of Five-
Year Cumulative Total Return graph. In determining individual
salaries within the established ranges, the Committee takes into
account individual experience, job responsibility and individual
performance during the prior year. The Committee does not assign
a specific weight to each of these factors in establishing
individual base salaries. Base salaries paid to the Company's
executive officers in fiscal 1994 were moderately below the 50th
percentile of the range of salaries of the comparator companies
in the surveys considered by the Committee.
Cash Bonus Plans. The purpose of the cash bonus component of
the compensation program is to provide a direct financial
incentive in the form of cash bonuses to executives and other
employees to achieve predetermined Division and Company profit
objectives. Profit objectives for each Division and for the
Company as a whole are determined at the beginning of each fiscal
year during the annual budgeting process and are approved by the
Board of Directors. These profit objectives are established based
upon competitive conditions and general economic circumstances
then prevailing in the markets in which the Company does
business. The Company currently has three cash bonus plans
covering three different groups that include executive officers
of the Company. For the fiscal year ended April 3, 1994, these
plans were the Structurals Division bonus program, the Airfoils
Division bonus program and the Corporate Officer bonus program.
No executive officer participates in more than one bonus plan for
any period of service.
An executive officer's eligibility for a bonus generally
depends upon achievement of the pre-determined profit objectives
of the bonus plan in which the officer participates. The profit
objectives are determined by the Compensation Committee to ensure
appropriate return to shareholders before eligibility for a bonus
arises. Target bonus amounts are established by the Committee for
each executive officer at the beginning of each fiscal year, at a
Page 6
</Page>
<PAGE>
percentage of the executive officer's base salary. Bonus targets
for executive officers in fiscal 1994 ranged from 80 percent to
100 percent of base salary. If the pre-determined profit goals
are met, a preliminary bonus amount is calculated under the bonus
plan formula. The final bonus amount paid to an eligible
executive officer is determined by the Committee, which has
discretion to increase or decrease the formula-derived figure
within certain limits based upon its assessment of the
individual's performance, and to pay special bonuses in
extraordinary circumstances as judged by the Committee. Bonus
awards for fiscal 1994 were formula-derived for participants in
the Airfoils Division bonus program, and the Corporate Officer
bonus program, and were not increased or decreased by the
Committee under its discretionary power. The bonus award for the
executive officer who participates in the Structurals Division
bonus program was initially formula-derived, and then was
increased under the discretionary power of the Committee upon a
determination that the bonus formula applied to the Structurals
Division in 1994 had not resulted in an appropriate reward for
the performance by the executive officer in view of the
challenges addressed by the Structurals Division in fiscal 1994.
Stock Options. Under the Company's compensation policy, stock
options are the primary vehicle for rewarding long-term
achievement of Company goals. The objectives of the program are
to align employee and shareholder long-term interests by creating
a strong and direct link between compensation and increases in
share value. Under the Company's Stock Incentive Plan (Plan), the
Board of Directors or the Committee may grant options to purchase
Common Stock of the Company to key employees of the Company and
its subsidiaries. Approximately 120 persons, including all of the
Company's executive officers, currently participate in the Plan.
The Board of Directors makes annual grants of nonstatutory
options to acquire the Company's Common Stock at an exercise
price equal to the fair market value of the shares on the date of
grant. The number of shares subject to option grants is
determined by formula, on a basis intended to match the reward
potential of the participant's current target bonus opportunity
if the underlying share price doubles over the five-year period
following the date of grant. Assuming a current stock price of
$30, an employee with a target bonus of $50,000 would receive an
option to purchase 1,667 shares ($50,000 divided by the $30 gain
achieved by a doubling of stock value to $60). The options vest
in 25 percent increments over the four-year period following
grant. All nonstatutory stock options granted to date become
fully exercisable upon a change in control of the Company.
Chief Executive Officer Compensation
The Committee determined the Chief Executive Officer's
compensation for fiscal 1994, with the final approval of the
Board of Directors. The Chief Executive Officer's base salary was
determined based upon a review of the salaries of chief executive
officers for companies of comparable size and the comparator
group of companies surveyed by the consultant, and upon a review
of the Chief Executive Officer's performance. In keeping with the
compensation policies described above, which emphasize both short-
term and long-term performance rewards rather than base salary,
the Chief Executive Officer's salary was set moderately below the
median base salary of the comparator companies included in the
survey reviewed by the Committee. The Chief Executive Officer's
bonus for 1994 was determined under the Corporate Officer formula
described under Cash Bonus Plans, above, based upon achievement
of Company profit objectives for fiscal 1994, and was not
increased or decreased under the Committee's discretionary
powers. No special bonus was paid to the Chief Executive Officer
in respect of fiscal 1994. Option grants were determined under
the formula described under Stock Option Plan, above.
Don C. Frisbee
Carroll M. Martenson
Steven G. Rothmeier
Harry C. Stonecipher
Page 7
</Page>
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following line graph provides a comparison of the annual
percentage change in the Company's cumulative total shareholder
return on its Common Stock with the cumulative total return of
the S&P 500 Index and a peer group consisting of companies
included in the S&P Aerospace Index. In addition, the graph
includes a comparator group selected by the Company consisting of
the public companies known to the Company to be primarily engaged
in manufacturing unfinished components for the aerospace
industry, as is the Company. The comparison assumes that $100 was
invested on April 1, 1989 in the Company's Common Stock and in
each of the foregoing indices, and in each case assumes the
reinvestment of dividends.
The following is a description of graphic material omitted
from the current filing:
Graph Title: PRECISION CASTPARTS CORP.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Type of Graph: Line Graph
X-Axis Information: Years from left to right 1989, 1990, 1991,
1992, 1993, 1994
Y-Axis Information: Dollars from bottom to top 0, 20, 40, 60, 80,
100, 120, 140, 160, 180, 200, 220.
Specific Data Points:
<TABLE>
<CAPTION> 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
S&P 500 100 119 136 152 175 177
Aerospace Comparator
Group 100 86 70 55 40 40
Dow Jones Aerospace
and Defense 100 113 120 127 143 187
S&P Aerospace 100 112 121 128 145 189
Precision Castparts
Corp. 100 111 140 97 81 120
</TABLE>
[FN]
__________
(1) The S&P Aerospace Index is substituted for the Dow Jones
Aerospace and Defense Index beginning with the 1994 Proxy
Statement. Both indexes are presented for comparative
purposes in this transitional year. The companies comprising
these indices are substantially the same. Therefore, the
trend lines for the two indices overlay one another due to
substantially equivalent cumulative total return over the
five-year period.
(2) The Aerospace Comparator Group was selected by the Company,
and consists of Hexcel Corporation; Rohr, Inc.; Sequa
Corporation; SPS Technologies, Inc.; and Wyman-Gordon
Company. The Company believes these companies to be
representative of public companies that are primarily
manufacturers and suppliers of unfinished components for the
aerospace industry, as is the Company. Performance
information of the Aerospace Comparator Group is supplied on
a voluntary basis and is in addition to required performance
disclosure.
Page 8
</Page>
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth compensation paid to the Chief
Executive Officer and the other four most highly compensated
executive officers of the Company for services in all capacities
to the Company and its subsidiaries during each of the last three
fiscal years.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation(1) Awards
________________________________________________________________________________
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus(2) Options (3) Compensation(4)
________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
William C. McCormick 1994 $328,542 $164,886 12,000 $3,721
President and Chief 1993 315,000 110,000 18,129 2,160
Executive Officer 1992 293,972 258,174 8,345 2,385
Peter G. Waite 1994 242,292 250,893 8,505 0
Executive Vice 1993 235,000 89,300 11,482 0
President-Airfoils 1992 225,783 232,253 5,741 644
Mark Donegan 1994 173,042 85,996 5,143 61,984
Executive Vice 1993 127,254 75,311 6,993 0
President-Structurals (5)
William D. Larsson 1994 155,750 70,350 4,922 354
Vice President and 1993 146,458 50,000 7,094 296
Chief Financial Officer 1992 141,021 105,683 3,302 330
Roy M. Marvin 1994 143,666 57,682 4,328 1,292
Vice President- 1993 136,459 50,000 6,216 1,067
Administration and 1992 127,875 92,785 2,901 1,193
Secretary
<FN>
__________
(1) Includes compensation deferred at the
election of the executive officers
under the Company's 401(k) Plan.
Under the Company's 401(k) Plan,
officers and other employees of the
Company may elect to defer a
percentage of their eligible
compensation (such percentage to be
selected by the participant from a
range selected by the administrator
of the Plan, but subject to
limitations under the Internal
Revenue Code). Amounts deferred by an
employee are deposited by the Company
in a trust to be invested for the
employee's benefit pending
distribution to the employee after
termination of employment or upon in-
service withdrawal at the request of
the employee due to extraordinary
hardship. The Company has not made
any contributions under this Plan.
(2) These amounts are cash awards under
the bonus plans described under Cash
Bonus Plans at page 6.
(3) Represents shares of Common Stock
issuable upon exercise of
nonstatutory stock options granted
under the Company's Stock Incentive
Plan described under Stock Options at
page 7.
(4) Includes $61,852 reimbursed
relocation expense for Mr. Donegan in
1994. All other amounts for named
executive officers represent term
life insurance premiums paid by the
Company.
(5) Mr. Donegan became an executive
officer of the Company on October 1,
1992. The table does not include
compensation paid by the Company or
its subsidiaries during prior fiscal
years.
</TABLE>
Page 9
</Page>
<PAGE>
Stock Option Grants in Last Fiscal Year
The following table provides information
regarding stock options granted to certain
executive officers in fiscal 1994.
<TABLE>
<CAPTION>
Individual Grants
____________________________________________
Potential Realizable
Percent of Value at Assumed
Total Annual Rates of
Number of Options Stock Price
Securities Granted to Appreciation for
Underlying Employees Exercise Option Term (2)
Options in Fiscal Price Expiration __________________
Name Granted (1) Year per Share Date 5% 10%
_________________________________________________________________
______________________
<S> <C> <C> <C> <C> <C> <C>
William C. McCormick 12,000 7.8 $26.25 10/26/00 $128,237 $298,846
Peter G. Waite 8,505 5.6 26.25 10/26/00 90,888 211,807
Mark Donegan 5,143 3.4 26.25 10/26/00 54,960 128,080
William D. Larsson 4,922 3.2 26.25 10/26/00 52,598 122,577
Roy M. Marvin 4,328 2.8 26.25 10/26/00 46,251 107,784
<FN>
__________
(1) Options are granted at fair market
value at the date of grant. Options
become exercisable to the extent of
25 percent of the shares one year
after the date of grant and to the
extent of 25 percent of the shares
each year thereafter. Under the terms
of the Company's Stock Incentive
Plan, each of the options is subject
to accelerated vesting in the event
of a change in control of the
Company. Each of the options is
subject to early termination in the
event of termination of employment.
Each option terminates 12 months
following death, disability or
retirement at normal retirement age
or bona fide early retirement, and
six months after termination of
employment for any other reason.
(2) In accordance with rules of the
Securities and Exchange Commission,
these amounts are the hypothetical
gains or "option spreads" that would
exist for the respective options
based on assumed rates of annual
compound stock price appreciation of
five percent and ten percent from the
date the options were granted over
the full option term.
</TABLE>
Stock Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values.
The following table indicates (i) stock
options exercised by certain executive
officers during fiscal 1994, including the
value realized on the date of exercise,
(ii) the number of shares subject to
exercisable (vested) and unexercisable
(unvested) stock options as of the
Company's fiscal year-end, April 3, 1994
and (iii) the value of "in-the-money"
options, which represents the positive
spread between the exercise price of
existing stock options and the year-end
price of the Common Stock.
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares Held at Fiscal Year-End at Fiscal Year-End
Acquired Value (Exercisable (Exercisable
Name on Exercise Realized (1) /Unexercisable) /Unexercisable) (2)
_____________________________________________________________________________
_______________________
<S> <C> <C> <C> <C> <C> <C>
William C. McCormick 0 0 84,762 (exercisable)$1,093,925 (exercisable)
31,749 (unexercisable) 317,244 (unexercisable)
Peter G. Waite 0 0 54,244 (exercisable) 515,008 (exercisable)
21,468 (unexercisable) 208,497 (unexercisable)
Mark Donegan 0 0 11,266 (exercisable) 50,890 (exercisable)
12,160 (unexercisable) 125,602 (unexercisable)
William D. Larsson 9,125 $133,526 23,339 (exercisable) 97,621 (exercisable)
12,790 (unexercisable) 126,290 (unexercisable)
Roy M. Marvin 6,625 166,685 27,670 (exercisable) 259,623 (exercisable)
11,230 (unexercisable) 110,783 (unexercisable)
<FN>
__________
(1) Aggregate market value of the shares
covered by the options, less the
aggregate price paid by the
executive.
(2) Calculated based on the March 29,
1994 closing stock price of $33.625.
Page 10
</TABLE>
</Page>
<PAGE>
Retirement Plan
The Company maintains a Retirement Plan under which all
eligible domestic employees, including officers and those
directors who are full-time employees, receive benefits at
retirement based on average monthly salary in the five
consecutive years of highest compensation (exclusive of bonuses)
and length of service with the Company. Employees do not
contribute to the Retirement Plan, and the amount of the
Company's annual contribution is based on an actuarial
determination. The Retirement Plan provides that a participant's
accrued benefit will become 100 percent vested upon the
occurrence of a change in control of the Company and provides for
disposition to participants of any surplus assets in the
Retirement Plan upon termination of the Retirement Plan following
a change in control of the Company.
The Company maintains a Supplemental Executive Retirement Plan
(SERP) to provide supplemental retirement benefits to certain key
employees selected by the Compensation Committee. The SERP
provides participating employees with a supplemental retirement
benefit upon normal retirement at age 65 with 25 years of
service. The supplemental retirement benefit is designed to pay a
basic monthly benefit equal to 55 percent of Final Average Pay
(as defined in the Retirement Plan, but including one-half of any
bonus and all of any deferred compensation) minus both the amount
of any benefit under the Retirement Plan and the Primary Social
Security Benefit (as defined in the Retirement Plan). For
participants retiring with less than 25 years of service at age
65, the basic benefit under the SERP formula before offset is
reduced by 1/25 for each year less than 25. There is a provision
for an actuarially reduced early retirement benefit at or after
age 55 with at least 10 years of service. For participants
retiring with more than 25 years of service at age 65, the
benefit is (a) the basic benefit before offset, plus (b) 0.5
percent of Final Average Pay times years of service over 25,
minus (c) both the amount of any benefit under the Retirement
Plan and the Primary Social Security Benefit. Service and pay can
continue to accrue if retirement is deferred past age 65, but
there is no actuarial increase for deferred start of benefits
after age 65. The SERP benefit for any participant who is a five-
percent shareholder of the Company over a 20-year period is half
the amount otherwise provided under the SERP. The SERP provides
for lump-sum payment of an accelerated vested benefit in the
event of termination of employment following a change in control
of the Company. Each of the executive officers of the Company has
been designated as a participant in the SERP.
The following table shows the estimated annual benefits payable
under the Company's Retirement Plan and SERP to employees upon
normal retirement (age 65) as of April 3, 1994. The table
assumes, for purposes of calculating the SERP portion of the
estimated annual benefit, that the employee receives an annual
bonus equal to one-third of salary in each year used in computing
the five-year average salary at retirement. Individual variations
in bonus awards will result in adjustments to the SERP component
of the estimated annual benefit. The amounts listed are net of an
actuarially determined offset for estimated Social Security
benefits.
<TABLE>
<CAPTION>
Highest
Five-Year
Average
Salary at Years of Service at Retirement
Retirement 10 15 20 25 30 35
________________________________________________________
______________________
<S> <C> <C> <C> <C> <C> <C>
$140,000 $23,041 $ 40,184 $ 58,151 $
76,117$ 80,201 $ 84,284
160,000 27,351 47,884 68,417
88,951 93,617 98,284
180,000 32,484 55,584 78,684
101,784 107,034 112,284
240,000 47,884 78,684 109,484
140,284 147,284 154,284
280,000 58,151 94,084 130,017
165,951 174,117 182,284
330,000 70,984 113,334 155,684
198,034 207,659 217,284
350,000 76,117 121,034 165,951
210,867 221,076 231,284
380,000 83,817 132,584 181,351
230,117 241,201 252,284
400,000 88,951 140,284 191,617
242,951 254,617 266,284
</TABLE>
Page 11
</Page>
<PAGE>
Benefits payable under the Retirement
Plan are computed on an actuarial basis.
The following table shows the number of
credited years of service and the fiscal
1994 salaries, for purposes of the benefit
table above, for the five officers named
in the Summary Compensation Table.
<TABLE>
<CAPTION>
Credited Years Fiscal 1994
Name of Individual of Service Salary
_________________________________________________________________
<S> <C> <C>
William C. McCormick 9 $328,542
Peter G. Waite 13 242,292
Mark Donegan 8 173,042
William D. Larsson 14 155,750
Roy M. Marvin 32 143,666
</TABLE>
Severance Agreements
The Company's senior executives are parties to severance
agreements with the Company. The agreements generally provide for
the payment upon termination of the executive's employment by the
Company without cause or by the employee for "good reason" (as
defined in the severance agreement) within two years following a
change in control of the Company of an amount equal to three
times that employee's annual salary and bonus (on an after excise-
tax basis), a lump-sum pension payment based upon three
additional years of service and three years of continued coverage
under life, accident and health plans. Each executive is
obligated under the severance agreement to remain in the employ
of the Company for a period of 270 days following a "potential
change in control" (as defined in the severance agreement).
Messrs. McCormick, Waite, Donegan, Larsson and Marvin have each
entered into a severance agreement.
PROPOSAL 2: ADOPTION OF 1994
STOCK INCENTIVE PLAN
On February 2, 1994, the Board of Directors adopted the 1994
Stock Incentive Plan (1994 Plan), subject to shareholder
approval. The material terms of the 1994 Plan are described below
and are qualified in their entirety by reference to the 1994
Plan, a copy of which is attached as Appendix A. All capitalized
terms have the meanings set forth in the Plan. On June 3, 1994,
the closing sale price of the Common Stock reported on the New
York Stock Exchange was $33.25.
Reason for Adoption
The 1994 Plan was adopted to replace the 1984 Amended and
Restated Stock Incentive Plan (the 1984 Plan), which expired by
its terms in May 1994. As a result of such expiration the Company
is unable to make further grants under the 1984 Plan. The Board
of Directors believes the availability of stock options and
incentives is an important factor in the Company's ability to
attract and retain experienced key employees and to provide an
incentive for them to exert their best efforts for the Company.
Under the Company's compensation policies, stock options are the
primary vehicle for rewarding long-term achievement of Company
goals. Approximately 120 persons, including all of the Company's
executive officers, were participating in the 1984 Stock
Incentive Plan at the time of its expiration. The 1994 Plan will
enable the Company to continue to issue stock options to key
employees.
At the time of its expiration on May 16, 1994, the 1984 Plan
had 1,032,078 shares of common stock remaining available for
grant under the Plan. All of these shares had been reserved for
use under the 1984 Plan pursuant to approval by vote of the
Company's shareholders, but because of the 1984 Plan expiration,
cannot be used for future grants. The 1994 Stock Incentive Plan
proposed for shareholder approval will carry over these 1,032,078
shares previously approved by shareholders under the 1984 Plan,
plus any shares subject to currently outstanding options under
the 1984 Plan that are forfeited or expire after May 16, 1994 for
Page 12
</Page>
<PAGE>
future issuance under the 1994 Plan. The 1994 Plan does not
authorize issuance of additional shares beyond the number of
shares previously approved for issuance under the 1984 Plan which
have not been or will not be used under the 1984 Plan.
Terms of the 1994 Plan
Types of Awards. The 1994 Plan provides for the award of
incentive and non-statutory stock options, stock appreciation
rights, stock bonuses, restricted stock and cash bonus rights to
key employees of the Company and its subsidiaries.
Administration. The 1994 Plan is administered by the Board of
Directors, which has the authority, subject to the terms of the
1994 Plan, to determine the persons to whom awards may be
granted, the amount of the awards, the character of the awards,
the time or times at which all or a portion of each award may be
exercised and the other terms and conditions of awards. The Board
of Directors may delegate the administration of the 1994 Plan to
a committee of its members or of specified officers of the
Company, or both. All determinations of the Board of Directors or
the committee are conclusive.
Eligibility. Selected key employees and officers of the Company
or any of its subsidiaries are eligible to participate in the
1994 Plan. Approximately 120 persons are currently eligible to
participate.
Shares Available. The 1994 Plan provides that no more than
1,032,078 shares of authorized but unissued, or reacquired,
Common Stock may be issued pursuant to the 1994 Plan, plus any
shares subject to unexercised options granted under the 1984 Plan
that are forfeited or expire after May 16, 1994. Any shares of
Common Stock subject to an option or stock appreciation right
that are not issued before the expiration of the option or right
will again be available for award under the 1994 Plan. Any shares
of Common Stock sold or awarded as a bonus under the 1994 Plan
and forfeited to the Company or repurchased by the Company
pursuant to restrictions on those shares will again be available
for award under the 1994 Plan.
Incentive Stock Options. The Plan authorizes the Board of
Directors to grant incentive stock options, as defined under
Section 422 of the Internal Revenue Code of 1986, as amended
(Code), on terms and conditions it deems appropriate, subject to
the following: (1) the option price per share may not be less
than 100 percent of the fair market value of the Common Stock on
the date the option is granted, (2) the term of the option may
not exceed 10 years from the date of grant, (3) the purchase
price of Common Stock on exercise of an option is paid in cash
or, with the consent of the Board of Directors, by surrender to
the Company of shares of previously acquired Common Stock valued
at fair market value on the date of the option exercises or
pursuant to other forms of consideration, (4) an option expires
on the earlier of (i) the expiration of the term for which it was
granted, (ii) 12 months after termination of an optionee's
employment due to death, or (iii) three months after termination
of an optionee's employment for reasons other than death, and (5)
no optionee may be granted incentive stock options for Common
Stock if the aggregate fair market value (determined on the date
of grant) of shares with respect to which incentive stock options
are exercisable for the first time by that optionee during any
calendar year under the Plan or any other incentive stock option
plan of the Company or any subsidiary of the Company exceeds
$100,000.
Nonstatutory Stock Options. The Plan also authorizes the Board
of Directors to grant nonstatutory stock options. The option
price is determined by the Board of Directors at the time of
grant and may be any amount determined by the Board. The purchase
price of Common Stock on exercise of an option is paid as
described in clause (3) above and the period of time referred to
in clause 4(iii) above is six months. In the case of termination
Page 13
</Page>
<PAGE>
of employment by retirement at normal retirement age, any
nonstatutory option may be exercised before the earlier of (i)
the expiration of the term for which it was granted, or (ii) 12
months after termination of employment.
Upon a merger, consolidation or plan of exchange to which the
Company is a party or sale of substantially all of the Company's
assets, the Board of Directors may elect that outstanding
incentive and nonstatutory stock options and stock appreciation
rights, as described below, will: (1) remain in effect in
accordance with their terms, (2) be converted into options or
stock appreciation rights with respect to stock of the surviving
or acquiring corporation or (3) be exercisable at any time during
the 30-day period before consummation of the transaction. Upon
dissolution of the Company, the Board of Directors may elect to
treat unexercised options or stock appreciation rights in
accordance with clause (3) above, or to waive or modify any
restriction on the options or stock appreciation rights.
Stock Appreciation Rights. The Board of Directors may grant a
stock appreciation right (SAR) with respect to a share of Common
Stock or in connection with an option, or portion thereof, which
can be exercised when and to the same extent as the related
option. Each SAR entitles the holder, upon exercise, to receive
in exchange therefor consideration in cash or shares of Common
Stock equal in value to the amount by which the fair market value
of one share of Common Stock exceeds the value of such share on
the date of grant or, in the case of an SAR granted in connection
with an option or portion thereof, to receive in exchange
therefor consideration in cash or shares of Common Stock equal in
value to the amount by which the fair market value of one share
of Common Stock exceeds the option price per share of the related
option, multiplied by the number of shares covered by the related
option, or portion thereof, surrendered by the optionee.
The existence of SARs or certain bonus rights described below
would require charges to the Company's income, for financial
accounting purposes, over the life of the right based upon the
amount of appreciation, if any, in the market value of the Common
Stock of the Company over the exercise price of shares subject to
SARs or bonus rights.
Stock Bonus. The Plan authorizes the Board of Directors to
grant bonuses of Common Stock to Plan participants, subject to
terms, conditions and restrictions determined by the Board of
Directors. No cash payments will be required for any stock bonus,
except that the Board of Directors may require a participant to
pay amounts necessary to satisfy applicable tax withholding
requirements.
Restricted Stock. The Plan provides that the Company may issue
restricted stock to Plan participants in such amounts, for such
consideration, subject to such restrictions and on such terms and
conditions as the Board of Directors may determine. Unless
otherwise determined by the Board of Directors, restricted stock
issued to officers may not be sold until six months after the
date the stock is issued.
Cash Bonus Rights. The Board of Directors may grant cash bonus
rights under the Plan in connection with (i) options granted or
previously granted, (ii) stock appreciation rights granted or
previously granted, (iii) stock bonuses awarded or previously
awarded and (iv) shares sold or previously sold under the Plan.
Bonus rights granted in connection with options entitle the
optionee to a cash bonus if and when the related option is
exercised. If shares are purchased on the exercise of an option
and the optionee does not exercise a related SAR, the amount of
the bonus is determined by multiplying the excess of the total
fair market value of the shares to be acquired upon the exercise
over the total option price for the shares by the applicable
bonus percentage. If an optionee exercises a related SAR in
connection with the termination of an option, the amount of the
bonus is determined by multiplying the total fair market value of
the shares and cash received pursuant to the exercise of the SAR
by the applicable bonus percentage. The bonus percentage
applicable to any bonus right is determined by the Board of
Directors. Bonus rights granted in connection with stock bonuses
entitle the recipient to a cash bonus, in an amount determined by
the Board of Directors, at the time the stock is awarded or at
such time as any restrictions to which the stock is subject
lapse. Bonus rights granted in connection with restricted stock
purchases entitle the recipient to a cash bonus in an amount
determined by the Board of Directors, payable when the shares are
purchased or when restrictions, if any, to which the stock is
subject lapse. Bonus rights granted in connection with restricted
Page 14
</Page>
<PAGE>
stock purchases terminate in the event that the restricted stock
is repurchased by the Company or forfeited by the holder pursuant
to the restrictions. The grant of cash bonus rights in connection
with incentive stock options may affect the eligibility of the
options for treatment as "incentive stock options" under Code
Section 422(b).
A special acceleration of all options and stock appreciation
rights outstanding under the 1994 Plan will occur, and such
options or stock appreciation rights will become exercisable in
full, if certain events occur, including a) shareholder approval
of (i) a merger in which all holders of Common Stock receive cash
or which results in the holders of Common Stock holding 50
percent or less of the voting securities of the surviving entity,
(ii) sale of substantially all the assets of the Company, or
(iii) a plan of liquidation or dissolution of the Company; b) a
transaction in which a person acquires 20 percent or more of the
Company's outstanding shares; or c) change in the majority of
members of the Board of Directors during a two-year period.
Amendments. The Board of Directors may at any time, and from
time to time, amend the Plan in such respects as it deems
advisable because of changes in the law while the Plan is in
effect or for any other reason.
Tax Consequences
Incentive Stock Options. Generally, no income is recognized by
the optionee on the grant or exercise of an incentive stock
option. The optionee generally recognizes income on disposition
of the shares acquired on exercise of the incentive stock option
equal to the excess of the fair market value of the option stock
on the date of disposition over the option price. The character
of the income is determined by whether certain holding period
requirements are met. On exercise of an incentive stock option,
an amount equal to the excess of the fair market value (on the
date of exercise) of the option stock over the option price is
includable in income for purposes of determining the optionee's
alternative minimum taxable income.
To the extent that a change in control causes the aggregate
fair market value (determined on the date of grant of the option)
of shares with respect to which an optionee's incentive stock
options are exercisable for the first time during a calendar year
to exceed $100,000, such options will not be governed by the
rules in the preceding paragraph. Instead, the tax consequences
of such options will be identical to the tax consequences
applicable to nonstatutory stock options, as described in the
following paragraph.
Nonstatutory Stock Options. No income is recognized by the
optionee on the grant of a nonstatutory stock option. The
optionee recognizes ordinary income on exercise of the
nonstatutory stock option equal to the excess of the fair market
value of the option stock on the date of exercise over the option
price.
Stock Appreciation Rights. A participant recognizes ordinary
income on the exercise of a stock appreciation right in an amount
equal to cash received and the fair market value of Common Stock
received.
Bonus Stock. A participant generally will recognize ordinary
income equal to the fair market value of the bonus Common Stock.
Restricted Stock. Generally, a participant will recognize no
income on the receipt of restricted stock. Instead, a participant
Page 15
</Page>
<PAGE>
generally will recognize income at the time the restrictions on
the stock lapse. The amount of income recognized at that time
generally will equal the excess (if any) of the fair market value
(at that time) of the stock over the purchase price. However, the
particular tax consequences applicable with respect to restricted
stock will vary depending on the nature of the restrictions and
whether the participant makes an election pursuant to Code
Section 83(b).
Cash Bonus Rights. A participant will recognize ordinary income
equal to the amount of the cash bonus paid.
The Company generally will be entitled to a deduction equal to
the ordinary income recognized by the participant in the same
taxable year in which the participant recognizes ordinary income
with respect to nonstatutory stock options, stock appreciation
rights, bonus stock, restricted stock or cash bonus rights. The
Company generally will not be entitled to a deduction in respect
of an incentive stock option.
Recommendation by the Board of Directors
The Board of Directors recommends a vote FOR Proposal 2. If a
majority of the shares entitled to vote is present at the
meeting, the proposal will be adopted if more shares are cast for
the proposal than are cast against the proposal. Abstentions and
broker non-votes will be treated as shares present and not
voting.
PROPOSAL 3: APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
On May 18, 1994, the Board of Directors appointed Price
Waterhouse to act as auditors of the Company's financial
statements for the fiscal year ending April 2, 1995, subject to
ratification of the appointment by the shareholders.
Representatives of Price Waterhouse will be present at the annual
meeting, will be given the opportunity to make a statement if
they wish and will be available to respond to appropriate
questions.
Recommendation by the Board of Directors
The Board of Directors recommends a vote FOR Proposal 3. If a
majority of the shares entitled to vote is present at the
meeting, the proposal will be adopted if more shares are cast for
the proposal than are cast against the proposal. Abstentions and
broker non-votes will be treated as shares present and not
voting.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's executive officers and directors, and persons who
own more than 10 percent of the Company's Common Stock, to file
initial reports of ownership and reports of changes in ownership
of Common Stock of the Company with the Securities and Exchange
Commission. To the Company's knowledge, based solely on reports
and other information submitted by executive officers and
directors, the Company believes that during the year ended April
3, 1994 each of its executive officers, directors and persons who
own more than 10 percent of the Company's Common Stock complied
with all applicable Section 16(a) filing requirements.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended April 3,
1994 is transmitted herewith.
Page 16
</Page>
<PAGE>
METHOD AND COST OF SOLICITATION
The cost of solicitation of proxies will be paid by the
Company. In addition to solicitation by mail, employees of the
Company may request the return of proxies personally or by
telephone. The Company has also engaged Morrow & Co. to assist
with the solicitation of proxies, for a fee of $6,000. The
Company will, on request, reimburse brokers and other persons
holding shares for the benefit of others for their expenses in
forwarding proxies and accompanying material and in obtaining
authorization from beneficial owners of the Company's Common
Stock to execute proxies.
OTHER BUSINESS/DISCRETIONARY AUTHORITY
The Board of Directors does not intend to present any business
for action at the meeting other than the election of directors
and the proposals set forth herein, nor does it have knowledge of
any matters that may be presented by others. If any other matter
properly comes before the meeting, the persons named in the
accompanying form of proxy intend to vote in accordance with the
recommendations of the Board of Directors.
SHAREHOLDER PROPOSALS
A shareholder proposal to be considered for inclusion in proxy
material for the Company's 1995 Annual Meeting of Shareholders
must be received at the principal executive offices of the
Company no later than February 20, 1995.
Whether or not you expect to be present at the meeting, please
sign the accompanying form of proxy and return it in the enclosed
stamped, return envelope.
Roy M. Marvin
Secretary
Portland, Oregon
June 20, 1994
Page 17
</Page>
<PAGE>
APPENDIX A
PRECISION CASTPARTS CORP.
1994 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this 1994 Stock Incentive Plan (the
"Plan") of Precision Castparts Corp. (the "Company") is to
encourage selected employees of the Company and its subsidiaries
who are in a position to influence the financial success of the
Company or of its subsidiaries to acquire a proprietary interest
in the Company and to give them added incentive to advance the
interests of the Company, through an opportunity to share in its
profits and growth.
2. Shares Subject to the Plan. Subject to adjustment as
provided below and in paragraph 12, the shares to be offered
under the Plan shall consist of Common Stock of the Company, and
the total number of shares of Common Stock that may be issued
under the Plan shall not exceed 1,032,078 shares, plus any shares
that are subject to options granted under the Company's 1984
Stock Incentive Plan (the "1984 Plan") which are outstanding on
May 16, 1994 and which options expire, terminate or are cancelled
under such plan after May 16, 1994. The shares issued under the
Plan may be authorized and unissued shares or reacquired shares.
If an option or stock appreciation right granted under the Plan
expires, terminates or is cancelled, the unissued shares subject
to such option or stock appreciation right shall again be
available under the Plan. If shares sold or awarded as a bonus
under the Plan are forfeited to the Company or repurchased by the
Company, the number of shares forfeited or repurchased shall
again be available under the Plan.
3. Effective Date and Duration of Plan.
(a) Effective Date. The Plan shall become effective as of
May 18, 1994. No option or stock appreciation right granted
under the Plan to an officer who is subject to Section 16(b)
of the Securities Exchange Act of 1934, as amended (an
"Officer") or a director shall become exercisable, however,
until the Plan is approved by the affirmative vote of the
holders of a majority of the shares of Common Stock
represented at a shareholders meeting at which a quorum is
present and any such awards under the Plan prior to such
approval shall be conditioned on and subject to such approval.
Subject to this limitation, options and stock appreciation
rights may be granted and shares may be awarded as bonuses or
sold under the Plan at any time after the effective date and
before termination of the Plan.
(b) Duration. The Plan shall continue in effect until all
shares available for issuance under the Plan have been issued
and all restrictions on such shares have lapsed. The Board of
Directors may suspend or terminate the Plan at any time except
with respect to options and shares subject to restrictions
then outstanding under the Plan. Termination shall not affect
any outstanding options, any right of the Company to
repurchase shares or the forfeitability of shares issued under
the Plan.
4. Administration.
(a) Board of Directors. The Plan shall be administered by
the Board of Directors of the Company, which shall determine
and designate from time to time the individuals to whom awards
shall be made, the amount of the awards and the other terms
and conditions of the awards. Subject to the provisions of the
Plan, the Board of Directors may from time to time adopt and
amend rules and regulations relating to administration of the
Plan, advance the lapse of any waiting period, accelerate any
exercise date, waive or modify any restriction applicable to
shares (except those restrictions imposed by law) and make all
other determinations in the judgment of the Board of Directors
necessary or desirable for the administration of the Plan. The
interpretation and construction of the provisions of the Plan
and related agreements by the Board of Directors shall be
final and conclusive. The Board of Directors may correct any
defect or supply any omission or reconcile any inconsistency
in the Plan or in any related agreement in the manner and to
the extent it shall deem expedient to carry the Plan into
effect, and it shall be the sole and final judge of such
expediency.
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<PAGE>
(b) Committee. The Board of Directors may delegate to a
committee of the Board of Directors or specified officers of
the Company, or both (the "Committee") any or all authority
for administration of the Plan. If authority is delegated to a
Committee, all references to the Board of Directors in the
Plan shall mean and relate to the Committee except (i) as
otherwise provided by the Board of Directors, (ii) that only
the Board of Directors may amend or terminate the Plan as
provided in paragraphs 3 and 15 and (iii) that a Committee
including officers of the Company shall not be permitted to
grant options to persons who are officers of the Company. If
awards are to be made under the Plan to Officers or directors,
authority for selection of Officers and directors for
participation and decisions concerning the timing, pricing and
amount of a grant or award, if not determined under a formula
meeting the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, shall be delegated to a
committee consisting of two or more disinterested directors.
(c) Indemnification of Committee. In addition to such other
rights of indemnification as they may have as officers or
directors or as members of the Committee, the members of the
Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees actually and
necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection
with the Plan or any option granted thereunder, and against
all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected
by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to
matters as to which it shall be adjudged in such action, suit
or proceeding that such Committee member is liable for
negligence or misconduct in the performance of his duties;
provided that within sixty (60) days after institution of any
such action, suit or proceeding a Committee member shall in
writing offer the Company the opportunity, at its own expense,
to handle and defend the same.
5. Types of Awards; Eligibility. The Board of Directors may,
from time to time, take the following action, separately or in
combination, under the Plan: (i) grant Incentive Stock Options,
as defined in Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), as provided in paragraphs 6(a) and 6(b);
(ii) grant options other than Incentive Stock Options ("Non-
Statutory Stock Options") as provided in paragraphs 6(a) and
6(c); (iii) award stock bonuses as provided in paragraph 7; (iv)
sell shares subject to restrictions as provided in paragraph 8;
(v) grant stock appreciation rights as provided in paragraph 9;
(vi) grant cash bonus rights as provided in paragraph 10; and
(vii) grant foreign qualified awards as provided in paragraph 11.
Any such awards may be made to salaried key employees of the
Company or any subsidiary of the Company, including employees who
are officers or directors, who have substantial responsibility in
the direction and management of the Company or any of its
subsidiaries or divisions. The Board of Directors shall select
the individuals to whom awards shall be made and shall specify
the action taken with respect to each individual to whom an award
is made. At the discretion of the Board of Directors, an
individual may be given an election to surrender an award in
exchange for the grant of a new award. No individual may be
granted options or stock appreciation rights under the Plan for
more than 100,000 shares of Common Stock in any calendar year.
6. Option Grants.
(a) General Rules Relating to Options.
(i) Terms of Grant. The Board of Directors may grant
options under the Plan. With respect to each option grant,
the Board of Directors shall determine the number of shares
subject to the option, the option price, the period of the
option, the time or times at which the option may be
exercised and whether the option is an Incentive Stock
Option or a Non-Statutory Stock Option. At the time of the
Appendix Page 2
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<PAGE>
grant of an option or at any time thereafter, the Board of
Directors may provide that an optionee who exercised an
option with Common Stock of the Company shall automatically
receive a new option to purchase additional shares equal to
the number of shares surrendered and may specify the terms
and conditions of such new options.
(ii) Exercise of Options. Except as provided in paragraph
6(a)(iv) or as determined by the Board of Directors, no
option granted under the Plan may be exercised unless at
the time of such exercise the optionee is employed by the
Company or any subsidiary of the Company and shall have
been so employed continuously since the date such option
was granted. Absence on leave or on account of illness or
disability under rules established by the Board of
Directors shall not, however, be deemed an interruption of
employment for this purpose. Unless otherwise determined by
the Board of Directors, vesting of options shall not
continue during an absence on leave (including an extended
illness) or on account of disability. Except as provided in
paragraphs 6(a)(iv), 12 and 14, options granted under the
Plan may be exercised from time to time over the period
stated in each option in such amounts and at such times as
shall be prescribed by the Board of Directors, provided
that options shall not be exercised for fractional shares.
Unless otherwise determined by the Board of Directors, if
the optionee does not exercise an option in any one year
with respect to the full number of shares to which the
optionee is entitled in that year, the optionee's rights
shall be cumulative and the optionee may purchase those
shares in any subsequent year during the term of the
option. Unless otherwise determined by the Board of
Directors, if an Officer exercises an option within six
months of the grant of the option, the shares acquired upon
exercise of the option may not be sold until six months
after the date of grant of the option.
(iii) Nontransferability. Each Incentive Stock Option
and, unless otherwise determined by the Board of Directors
with respect to an option granted to a person who is
neither an Officer nor a director of the Company, each
other option granted under the Plan by its terms shall be
nonassignable and nontransferable by the optionee, either
voluntarily or by operation of law, except by will or by
the laws of descent and distribution of the state or
country of the optionee's domicile at the time of death,
and each option by its terms shall be exercisable during
the optionee's lifetime only by the optionee.
(iv) Termination of Employment.
(A) General Rule. Unless otherwise determined by the
Board of Directors, in the event the employment of the
optionee with the Company or a subsidiary terminates for
any reason other than because of physical disability,
death or, in the case of Nonstatutory Stock Options,
retirement, as provided in subparagraphs 6(a)(iv)(B),
(C) and (D), the option may be exercised at any time
prior to the expiration date of the option or the
expiration of three months (six months in the case of
Nonstatutory Stock Options) after the date of such
termination, whichever is the shorter period, but only
if and to the extent the optionee was entitled to
exercise the option at the date of such termination.
(B) Termination Because of Total Disability. Unless
otherwise determined by the Board of Directors, in the
event of the termination of employment because of total
disability, the option may be exercised at any time
prior to the expiration date of the option or the
expiration of three months after the date of such
termination (six months in the case of Nonstatutory
Stock Options), whichever is the shorter period, but
only if and to the extent the optionee was entitled to
exercise the option at the date of such termination. The
term "total disability" means a mental or physical
impairment which is expected to result in death or which
has lasted or is expected to last for a continuous
period of 12 months or more and which causes the
Appendix Page 3
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<PAGE>
optionee to be unable, in the opinion of the Company and
two independent physicians, to perform his or her duties
as an employee of the Company and to be engaged in any
substantial gainful activity. Total disability shall be
deemed to have occurred on the first day after the
Company and the two independent physicians have
furnished their opinion of total disability to the
Company.
(C) Termination Because of Death. Unless otherwise
determined by the Board of Directors, in the event of
the death of an optionee while employed by the Company
or a subsidiary, the option may be exercised at any time
prior to the expiration date of the option or the
expiration of 12 months after the date of death,
whichever is the shorter period, but only if and to the
extent the optionee was entitled to exercise the option
at the date of death and only by the person or persons
to whom such optionee's rights under the option shall
pass by the optionee's will or by the laws of descent
and distribution of the state or country of domicile at
the time of death.
(D) Termination Upon Retirement at Normal Retirement
Age or at Bona Fide Early Retirement. In the event the
employment of an optionee by the Company or by any
subsidiary of the Company is terminated by retirement at
normal retirement age as defined under the provisions of
the Company's Retirement Plan or under conditions of
bona fide early retirement, any Non-Statutory Stock
Option may be exercised at any time prior to its
expiration date or the expiration of 12 months after the
date of such termination of employment, whichever is the
shorter period, but only if and to the extent the
optionee was entitled to exercise the option on the date
of such termination.
(E) Amendment of Exercise Period Applicable to
Termination. The Board of Directors, at the time of
grant or at any time thereafter, may extend the 3-month,
6-month and 12-month exercise periods any length of
time not longer than the original expiration date of the
option, and may increase the portion of an option that
is exercisable, subject to such terms and conditions as
the Board of Directors may determine.
(F) Failure to Exercise Option. To the extent that the
option of any deceased optionee or of any optionee whose
employment terminates is not exercised within the
applicable period, all further rights to purchase shares
pursuant to such option shall cease and terminate.
(v) Purchase of Shares. Unless the Board of Directors
determines otherwise, shares may be acquired pursuant to an
option granted under the Plan only upon receipt by the
Company of notice in writing from the optionee of the
optionee's intention to exercise, specifying the date the
option being exercised was granted, the number of shares as
to which the optionee desires to exercise the option, and
the date on which the optionee desires to complete the
transaction, and if required in order to comply with the
Securities Act of 1933, as amended, containing a
representation that it is the optionee's present intention
to acquire the shares for investment and not with a view to
distribution. Unless the Board of Directors determines
otherwise, on or before the date specified for completion
of the purchase of shares pursuant to an option, the
optionee must have paid the Company the full purchase price
of such shares in cash (including, with the consent of the
Board of Directors, cash that may be the proceeds of a loan
from the Company) or, with the consent of the Board of
Directors, in whole or in part, in Common Stock of the
Company valued at fair market value, restricted stock,
promissory notes and other forms of consideration. The fair
market value of Common Stock provided in payment of the
purchase price shall be the closing price of the Common
Stock as reported in The Wall Street Journal on the trading
day preceding the date the option is exercised, or such
other reported value of the Common Stock as shall be
specified by the Board of Directors. No shares shall be
issued until full payment for the shares has been made.
With the consent of the Board of Directors, an optionee may
request the Company to apply automatically the shares to be
received upon the exercise of a portion of a stock option
Appendix Page 4
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<PAGE>
(even though stock certificates have not yet been issued)
to satisfy the purchase price for additional portions of
the option. Each optionee who has exercised an option shall
immediately upon notification of the amount due, if any,
pay to the Company in cash amounts necessary to satisfy any
applicable federal, state and local tax withholding
requirements. If additional withholding is or becomes
required beyond any amount deposited before delivery of the
certificates, the optionee shall pay such amount to the
Company on demand. If the optionee fails to pay the amount
demanded, the Company may withhold that amount from other
amounts payable by the Company to the optionee, including
salary, subject to applicable law. With the consent of the
Board of Directors an optionee may satisfy this obligation,
in whole or in part, by having the Company withhold from
the shares to be issued upon the exercise that number of
shares that would satisfy the withholding amount due or by
delivering to the Company Common Stock to satisfy the
withholding amount. Upon the exercise of an option, the
number of shares reserved for issuance under the Plan shall
be reduced by the number of shares issued upon exercise of
the option, less the number of shares surrendered in
payment of the option exercise or surrendered or withheld
to satisfy withholding obligations.
(b) Incentive Stock Options. Incentive Stock Options shall
be subject to the following additional terms and conditions:
(i) Limitation on Amount of Grants. No employee may be
granted Incentive Stock Options under the Plan if the
aggregate fair market value, on the date of grant, of the
Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by that employee during
any calendar year under the Plan and under any other
incentive stock option plan (within the meaning of Section
422 of the Code) of the Company or any parent or subsidiary
of the Company exceeds $100,000.
(ii) Limitations on Grants to 10 Percent Shareholders.
An Incentive Stock Option may be granted under the Plan to
an employee possessing more than 10 percent of the total
combined voting power of all classes of stock of the
Company or of any parent or subsidiary of the Company only
if the option price is at least 110 percent of the fair
market value of the Common Stock subject to the option on
the date it is granted, as described in paragraph 6(b)(iv),
and the option by its terms is not exercisable after the
expiration of five years from the date it is granted.
(iii) Duration of Options. Subject to paragraphs 6(a)(ii)
and 6(b)(ii), Incentive Stock Options granted under the
Plan shall continue in effect for the period fixed by the
Board of Directors, except that no Incentive Stock Option
shall be exercisable after the expiration of 10 years from
the date it is granted.
(iv) Option Price. The option price per share shall be
determined by the Board of Directors at the time of grant.
Except as provided in paragraph 6(b)(ii), the option price
shall not be less than 100 percent of the fair market value
of the Common Stock covered by the Incentive Stock Option
at the date the option is granted. The fair market value
shall be the closing price of the Common Stock as reported
in The Wall Street Journal on the day preceding the date
the option is granted, or if there has been no sale on that
date, on the last preceding date on which a sale occurred,
or such other value of the Common Stock as shall be
specified by the Board of Directors.
(v) Limitation on Time of Grant. No Incentive Stock
Option shall be granted on or after the tenth anniversary
of the effective date of the Plan.
(vi) Conversion of Incentive Stock Options. The Board of
Directors may at any time without the consent of the
optionee convert an Incentive Stock Option to a Non-
Statutory Stock Option.
(c) Non-Statutory Stock Options. Non-Statutory Stock Options
shall be subject to the following terms and conditions:
Appendix Page 5
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<PAGE>
(i) Option Price. The option price for Non-Statutory
Stock Options shall be determined by the Board of Directors
at the time of grant and may be any amount determined by
the Board of Directors.
(ii) Duration of Options. Non-Statutory Stock Options
granted under the Plan shall continue in effect for the
period fixed by the Board of Directors.
7. Stock Bonuses. The Board of Directors may award shares under
the Plan as stock bonuses. Shares awarded as a bonus shall be
subject to the terms, conditions, and restrictions determined by
the Board of Directors. The restrictions may include restrictions
concerning transferability and forfeiture of the shares awarded,
together with such other restrictions as may be determined by the
Board of Directors. If shares are subject to forfeiture, all
dividends or other distributions paid by the Company with respect
to the shares shall be retained by the Company until the shares
are no longer subject to forfeiture, at which time all
accumulated amounts shall be paid to the recipient. The Board of
Directors may require the recipient to sign an agreement as a
condition of the award, but may not require the recipient to pay
any monetary consideration other than amounts necessary to
satisfy tax withholding requirements. The agreement may contain
any terms, conditions, restrictions, representations and
warranties required by the Board of Directors. The certificates
representing the shares awarded shall bear any legends required
by the Board of Directors. Unless otherwise determined by the
Board of Directors, shares awarded as a stock bonus to an Officer
may not be sold until six months after the date of the award. The
Company may require any recipient of a stock bonus to pay to the
Company in cash upon demand amounts necessary to satisfy any
applicable federal, state or local tax withholding requirements.
If the recipient fails to pay the amount demanded, the Company
may withhold that amount from other amounts payable by the
Company to the recipient, including salary, subject to applicable
law. With the consent of the Board of Directors, a recipient may
deliver Common Stock to the Company to satisfy this withholding
obligation. Upon the issuance of a stock bonus, the number of
shares reserved for issuance under the Plan shall be reduced by
the number of shares issued, less the number of shares
surrendered or withheld to satisfy withholding obligations.
8. Restricted Stock. The Board of Directors may issue shares
under the Plan for such consideration (including promissory notes
and services) as determined by the Board of Directors. Shares
issued under the Plan shall be subject to the terms, conditions
and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability,
repurchase by the Company and forfeiture of the shares issued,
together with such other restrictions as may be determined by the
Board of Directors. If shares are subject to forfeiture or
repurchase by the Company, all dividends or other distributions
paid by the Company with respect to the shares shall be retained
by the Company until the shares are no longer subject to
forfeiture or repurchase, at which time all accumulated amounts
shall be paid to the recipient. All Common Stock issued pursuant
to this paragraph 8 shall be subject to a purchase agreement,
which shall be executed by the Company and the prospective
recipient of the shares prior to the delivery of certificates
representing such shares to the recipient. The purchase agreement
may contain any terms, conditions, restrictions, representations
and warranties required by the Board of Directors. The
certificates representing the shares shall bear any legends
required by the Board of Directors. Unless otherwise determined
by the Board of Directors, shares issued under this paragraph 8
to an Officer may not be sold until six months after the shares
are issued. The Company may require any purchaser of restricted
stock to pay to the Company in cash upon demand amounts necessary
to satisfy any applicable federal, state or local tax withholding
requirements. If the purchaser fails to pay the amount demanded,
the Company may withhold that amount from other amounts payable
by the Company to the purchaser, including salary, subject to
applicable law. With the consent of the Board of Directors, a
purchaser may deliver Common Stock to the Company to satisfy this
withholding obligation. Upon the issuance of restricted stock,
Appendix Page 6
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<PAGE>
the number of shares reserved for issuance under the Plan shall
be reduced by the number of shares issued, less the number of
shares surrendered in payment of the restricted stock or
surrendered or withheld to satisfy withholding obligations.
9. Stock Appreciation Rights.
(a) Grant . Stock appreciation rights may be granted under
the Plan by the Board of Directors, subject to such rules,
terms, and conditions as the Board of Directors prescribes.
(b) Exercise.
(i) Each stock appreciation right shall entitle the
holder, upon exercise, to receive from the Company in
exchange therefor an amount equal in value to the excess of
the fair market value on the date of exercise of one share
of Common Stock of the Company over its fair market value
on the date of grant (or, in the case of a stock
appreciation right granted in connection with an option,
the excess of the fair market value of one share of Common
Stock of the Company over the option price per share under
the option to which the stock appreciation right relates),
multiplied by the number of shares covered by the stock
appreciation right or the option, or portion thereof, that
is surrendered. No stock appreciation right shall be
exercisable at a time that the amount determined under this
subparagraph is negative. Payment by the Company upon
exercise of a stock appreciation right may be made in
Common Stock valued at fair market value, in cash, or
partly in Common Stock and partly in cash, all as
determined by the Board of Directors.
(ii) A stock appreciation right shall be exercisable only
at the time or times established by the Board of Directors.
If a stock appreciation right is granted in connection with
an option, the following rules shall apply: (1) the stock
appreciation right shall be exercisable only to the extent
and on the same conditions that the related option could be
exercised; (2) upon exercise of the stock appreciation
right, the option or portion thereof to which the stock
appreciation right relates terminates; and (3) upon
exercise of the option, the related stock appreciation
right or portion thereof terminates. Unless otherwise
determined by the Board of Directors, no stock appreciation
right granted to an Officer or director may be exercised
during the first six months following the date it is
granted.
(iii) The Board of Directors may withdraw any stock
appreciation right granted under the Plan at any time and
may impose any conditions upon the exercise of a stock
appreciation right or adopt rules and regulations from time
to time affecting the rights of holders of stock
appreciation rights. Such rules and regulations may govern
the right to exercise stock appreciation rights granted
prior to adoption or amendment of such rules and
regulations as well as stock appreciation rights granted
thereafter.
(iv) For purposes of this paragraph 9, the fair market
value of the Common Stock shall be the closing price of the
Common Stock as reported in The Wall Street Journal, or
such other reported value of the Common Stock as shall be
specified by the Board of Directors, on the trading day
preceding the date the stock appreciation right is
exercised.
(v) No fractional shares shall be issued upon exercise of
a stock appreciation right. In lieu thereof, cash may be
paid in an amount equal to the value of the fraction or, if
the Board of Directors shall determine, the number of
shares may be rounded downward to the next whole share.
(vi) Each stock appreciation right granted in connection
with an Incentive Stock Option, and unless otherwise
determined by the Board of Directors with respect to a
stock appreciation right granted to a person who is neither
an Officer nor a director of the Company, each other stock
appreciation right granted under the Plan by its terms
shall be nonassignable and nontransferable by the holder,
either voluntarily or by operation of law, except by will
or by the laws of descent and distribution of the state or
country of the holder's domicile at the time of death, and
each stock appreciation right by its terms shall be
exercisable during the holder's lifetime only by the
holder.
Appendix Page 7
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<PAGE>
(vii) Each participant who has exercised a stock
appreciation right shall, upon notification of the amount
due, pay to the Company in cash amounts necessary to
satisfy any applicable federal, state and local tax
withholding requirements. If the participant fails to pay
the amount demanded, the Company may withhold that amount
from other amounts payable by the Company to the
participant including salary, subject to applicable law.
With the consent of the Board of Directors a participant
may satisfy this obligation, in whole or in part, by having
the Company withhold from any shares to be issued upon the
exercise that number of shares that would satisfy the
withholding amount due or by delivering Common Stock to the
Company to satisfy the withholding amount.
(viii) Upon the exercise of a stock appreciation right
for shares, the number of shares reserved for issuance
under the Plan shall be reduced by the number of shares
issued, less the number of shares surrendered or withheld
to satisfy withholding obligations. Cash payments of stock
appreciation rights shall not reduce the number of shares
of Common Stock reserved for issuance under the Plan.
10. Cash Bonus Rights.
(a) Grant . The Board of Directors may grant cash bonus
rights under the Plan in connection with (i) options granted
or previously granted, (ii) stock appreciation rights granted
or previously granted, (iii) stock bonuses awarded or
previously awarded and (iv) shares sold or previously sold
under the Plan. Cash bonus rights will be subject to rules,
terms and conditions as the Board of Directors may prescribe.
Unless otherwise determined by the Board of Directors with
respect to a cash bonus right granted to a person who is
neither an Officer nor a director of the Company, each cash
bonus right granted under the Plan by its terms shall be
nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the
laws of descent and distribution of the state or country of
the holder's domicile at the time of death. The payment of a
cash bonus shall not reduce the number of shares of Common
Stock reserved for issuance under the Plan.
(b) Cash Bonus Rights in Connection With Options. A cash
bonus right granted in connection with an option will entitle
an optionee to a cash bonus when the related option is
exercised (or terminates in connection with the exercise of a
stock appreciation right related to the option) in whole or in
part. If an optionee purchases shares upon exercise of an
option and does not exercise a related stock appreciation
right, the amount of the bonus shall be determined by
multiplying the excess of the total fair market value of the
shares to be acquired upon the exercise over the total option
price for the shares by the applicable bonus percentage. If
the optionee exercises a related stock appreciation right in
connection with the termination of an option, the amount of
the bonus shall be determined by multiplying the total fair
market value of the shares and cash received pursuant to the
exercise of the stock appreciation right by the applicable
bonus percentage. The bonus percentage applicable to a bonus
right shall be determined from time to time by the Board of
Directors.
(c) Cash Bonus Rights in Connection With Stock Bonus. A cash
bonus right granted in connection with a stock bonus will
entitle the recipient to a cash bonus payable when the stock
bonus is awarded or restrictions, if any, to which the stock
is subject lapse. If bonus stock awarded is subject to
restrictions and is repurchased by the Company or forfeited by
the holder, the cash bonus right granted in connection with
the stock bonus shall terminate and may not be exercised. The
amount and timing of payment of a cash bonus shall be
determined by the Board of Directors.
(d) Cash Bonus Rights in Connection With Stock Purchases. A
cash bonus right granted in connection with the purchase of
stock pursuant to paragraph 8 will entitle the recipient to a
cash bonus when the shares are purchased or restrictions, if
any, to which the stock is subject lapse. Any cash bonus right
granted in connection with shares purchased pursuant to
Appendix Page 8
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paragraph 8 shall terminate and may not be exercised in the
event the shares are repurchased by the Company or forfeited
by the holder pursuant to applicable restrictions. The amount
of any cash bonus to be awarded and timing of payment of a
cash bonus shall be determined by the Board of Directors.
(e) Taxes. The Company shall withhold from any cash bonus
paid pursuant to paragraph 10 the amount necessary to satisfy
any applicable federal, state and local withholding
requirements.
11. Foreign Qualified Grants. Awards under the Plan may be
granted to such officers and employees of the Company and its
subsidiaries residing in foreign jurisdictions as the Board of
Directors may determine from time to time. The Board of Directors
may adopt such supplements to the Plan as may be necessary to
comply with the applicable laws of such foreign jurisdictions and
to afford participants favorable treatment under such laws;
provided, however, that no award shall be granted under any such
supplement with terms which are more beneficial to the
participants than the terms permitted by the Plan.
12. Changes in Capital Structure.
(a) Stock Splits; Stock Dividends. If the outstanding Common
Stock of the Company is hereafter increased or decreased or
changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of any
stock split, combination of shares or dividend payable in
shares, recapitalization or reclassification, appropriate
adjustment shall be made by the Board of Directors in the
number and kind of shares available for grants under the Plan.
In addition, the Board of Directors shall make appropriate
adjustment in the number and kind of shares as to which
outstanding options and stock appreciation rights, or portions
thereof then unexercised, shall be exercisable, so that the
optionee's proportionate interest before and after the
occurrence of the event is maintained. Notwithstanding the
foregoing, the Board of Directors shall have no obligation to
effect any adjustment that would or might result in the
issuance of fractional shares, and any fractional shares
resulting from any adjustment may be disregarded or provided
for in any manner determined by the Board of Directors. Any
such adjustments made by the Board of Directors shall be
conclusive.
(b) Mergers, Reorganizations, Etc. In the event of a merger,
consolidation or plan of exchange to which the Company is a
party or a sale of all or substantially all of the Company's
assets (each, a "Transaction"), the Board of Directors shall,
in its sole discretion and to the extent possible under the
structure of the Transaction, select one of the following
alternatives for treating outstanding options and stock
appreciation rights under the Plan:
(i) Outstanding options and stock appreciation rights
shall remain in effect in accordance with their terms.
(ii) Outstanding options and stock appreciation rights
shall be converted into options to purchase stock in the
corporation and stock appreciation rights with respect to
stock in the corporation that is the surviving or acquiring
corporation in the Transaction. The amount, type of
securities subject thereto and exercise price of the
converted options and stock appreciation rights shall be
determined by the Board of Directors of the Company, taking
into account the relative values of the companies involved
in the Transaction and the exchange rate, if any, used in
determining shares of the surviving corporation to be
issued to holders of shares of the Company. Unless
otherwise determined by the Board of Directors, the
converted options and stock appreciation rights shall be
vested only to the extent that the vesting requirements
relating to options and stock appreciation rights granted
hereunder have been satisfied.
(iii) Holders of outstanding options and stock
appreciation rights shall be provided a 30-day period prior
to the consummation of the Transaction during which
outstanding options and stock appreciation rights shall be
exercisable to the extent vested without any limit on
exercisability and upon the expiration of such 30-day
period, all unexercised options and stock appreciation
rights shall immediately terminate. The Board of Directors
may, in its sole discretion, accelerate the exercisability
of options or stock appreciation rights so that they are
exercisable in full during such 30-day period.
Appendix Page 9
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<PAGE>
(c) Dissolution of the Company. In the event of the
dissolution or liquidation of the Company, the Board of
Directors may in its sole discretion (i) provide a 30-day
period prior to such event during which optionees shall have
the right to exercise options and stock appreciation rights in
whole or in part without any limitation on exercisability and
upon the expiration of which 30-day period all unexercised
options and stock appreciation rights shall immediately
terminate, or (ii) waive or modify any restriction on the
options or stock appreciation rights.
13. Corporate Mergers, Acquisitions, etc. The Board of
Directors may also grant options, stock appreciation rights,
stock bonuses and cash bonuses and issue restricted stock under
the Plan having terms, conditions and provisions that vary from
those specified in this Plan provided that any such awards are
granted in substitution for, or in connection with the assumption
of, existing options, stock appreciation rights, stock bonuses,
cash bonuses and restricted stock granted, awarded or issued by
another corporation and assumed or otherwise agreed to be
provided for by the Company pursuant to or by reason of a
transaction involving a corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or
liquidation to which the Company or a subsidiary is a party.
14. Acceleration in Certain Events.
Notwithstanding any other provisions of the Plan, a special
acceleration ("Special Acceleration") of all options and stock
appreciation rights outstanding under the Plan shall occur and
such options and stock appreciation rights shall immediately
become exercisable in full at any time when any one of the
following events has taken place:
(a) The shareholders of the Company approve one of the
following ("Approved Transactions"):
(i) Any consolidation, merger or plan of exchange
involving the Company ("Merger") pursuant to which Common
Stock would be converted into cash; or
(ii) Any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company; or
(iii) The adoption of any plan or proposal for the
liquidation or dissolution of the Company; or
(iv) Any merger, consolidation or plan of exchange which
results in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting
securities of the surviving entity) 50% or less of the
combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately
after such merger, consolidation or exchange; or
(v) Any merger, consolidation or plan of exchange
effected to implement a recapitalization of the Company (or
similar transaction) in which a person acquires more than
20% of the combined voting power of the Company's then
outstanding securities; or
(b) A tender or exchange offer, other than one made by the
Company, is made for Common Stock (or securities convertible
into Common Stock) and such offer results in a portion of
those securities being purchased and the offeror after the
consummation of the offer is the beneficial owner (as
determined pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")),
directly or indirectly, of more than 20 percent of the
outstanding Common Stock (an "Offer"); or
(c) Any Person is or becomes the beneficial owner of more
than 20 percent of the Company's outstanding Common Stock; or
(d) During any period of two consecutive years, individuals
who at the beginning of such period constituted a majority of
the Board of Directors cease for any reason to constitute a
majority thereof unless the nomination or election of such new
directors was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the
beginning of such period.
Appendix Page 10
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<PAGE>
All options and stock appreciation rights that are
accelerated pursuant to this paragraph 14 shall terminate upon
the dissolution of the Company or upon the consummation of any
Merger pursuant to which Common Stock would be converted to
cash. The terms used in this paragraph 14 and not defined
elsewhere in the Plan shall have the same meanings as such
terms have in the Exchange Act and the rules and regulations
adopted thereunder.
15. Amendment of Plan. The Board of Directors may at any time,
and from time to time, modify or amend the Plan in such respects
as it shall deem advisable because of changes in the law while
the Plan is in effect or for any other reason. Except as provided
in paragraphs 6(a)(iv), 9, 12 and 14, however, no change in an
award already granted shall be made without the written consent
of the holder of such award.
16. Approvals. The obligations of the Company under the Plan
are subject to the approval of state and federal authorities or
agencies with jurisdiction in the matter. The Company will use
its best efforts to take steps required by state or federal law
or applicable regulations, including rules and regulations of the
Securities and Exchange Commission and any stock exchange on
which the Company's shares may then be listed, in connection with
the grants under the Plan. The foregoing notwithstanding, the
Company shall not be obligated to issue or deliver Common Stock
under the Plan if such issuance or delivery would violate
applicable state or federal securities laws.
17. Employment Rights. Nothing in the Plan or any award
pursuant to the Plan shall confer upon any employee any right to
be continued in the employment of the Company or any subsidiary
or interfere in any way with the right of the Company or any
subsidiary by whom such employee is employed to terminate such
employee's employment at any time, for any reason, with or
without cause, or to decrease such employee's compensation or
benefits.
18. Rights as a Shareholder. The recipient of any award under
the Plan shall have no rights as a shareholder with respect to
any Common Stock until the date of issue to the recipient of a
stock certificate for such shares. Except as otherwise expressly
provided in the Plan, no adjustment shall be made for dividends
or other rights for which the record date occurs prior to the
date such stock certificate is issued.
Appendix Page 11
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<PAGE>
PROXY
The undersigned, revoking all prior proxies, hereby appoints W.
C. McCormick and R. M. Marvin, and each of them, as proxies, with
full power of substitution, to vote on behalf of the undersigned
at the Annual Meeting of Shareholders of Precision Castparts
Corp. (the ''Company'') to be held on Wednesday, August 3, 1994,
or at any adjournment thereof, all shares of the undersigned in
the Company. The proxies are instructed to vote as follows:
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below (except as marked to
contrary below).
/ / WITHHOLD AUTHORITY to vote for all nominees listed
below.
Nominees: Edward H. Cooley, William C. McCormick,
Dwight A. Sangrey (3-year terms), Steven G. Rothmeier (1-
year term)
(To withhold your vote for any individual nominee, strike a
line through the nominee's name in the list above.)
2. PROPOSAL TO APPROVE 1994 STOCK INCENTIVE PLAN
FOR / / AGAINST / / ABSTAIN / /
3. PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
FOR / / AGAINST / / ABSTAIN / /
The shares represented by this proxy will be voted in
accordance with the instructions given.
(Continued and to be signed on other side)
This proxy is solicited on behalf of the Company's Board of
Directors. The Board of Directors recommends a vote FOR each of
the nominees and FOR each of the above Proposals.
Unless contrary instructions are given, the shares will be voted
for the Nominees, for the Proposals and on any other business
that may properly come before the meeting in accordance with the
recommendations of management.
/ / Please check here if you plan to attend the meeting in
person.
Please sign exactly as your name appears on this card. Persons
signing as executor, administrator, trustee, custodian or in any
other official or representative capacity should sign their full
title.
Receipt is acknowledged of the notice and proxy statement
relating to this meeting.
Signature(s)
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY PROMPTLY.
Date , 1994
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